Bank accounts frozen without justification, hindering business operations. Appeal successful. The appellant appealed against the freezing of bank accounts following the rejection of a request to unfreeze them. The appellant had already deposited a ...
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Bank accounts frozen without justification, hindering business operations. Appeal successful.
The appellant appealed against the freezing of bank accounts following the rejection of a request to unfreeze them. The appellant had already deposited a portion of the demanded amount, and freezing the accounts hindered business operations. The court found that the department failed to justify the freezing and did not provide alternatives for the appellant to conduct business. As a result, the order denying the request to unfreeze the accounts was set aside, and the appeal was allowed.
Issues involved: The appeal against the order rejecting the request to unfreeze the bank accounts.
Summary:
Issue 1: Confirmation of demands and freezing of bank accounts The appellant appealed against two Orders-in-Original confirming demands of Rs.77,471/- and Rs.11,81,952/-. While the demand of Rs.77,471/- was deposited, the appeal against the demand of Rs.11,81,952/- was pending. The department froze the appellant's bank accounts after issuing a recovery notice for the latter amount. The appellant requested to defreeze the accounts, which was rejected. The counsel argued that most of the amount in question had already been deposited, and the frozen accounts had sufficient balance to meet any obligations. It was contended that freezing the accounts hindered the appellant's business operations due to lack of funds, and no justification was provided by the department for the freezing.
Issue 2: Justification for freezing accounts Upon hearing both parties, it was observed that the appeal against the Order-in-Original confirming the larger demand was pending, and a significant portion of the amount had already been deposited. The appellant's business required financial transactions, and freezing the accounts impeded its operations. The department failed to demonstrate any alternative means for the appellant to sustain the business without access to the frozen funds. Consequently, the order declining the request to defreeze the accounts was set aside, and the appeal was allowed.
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